Struggling Dyson in sale of ceramics division

The Sheffield-based company, which is believed to be close to finalising a debt swap with its banks, said it has sold Precision Ceramics to a management-led team for 100,000.

Dyson said the business, which is based in Dewsbury, will trade as Magma Ceramics, and 24 staff will transfer across.

Precision makes products used in the glass and metals industries.

Dyson added its subsidiary Dyson Industries has exchanged contracts with Jemmtec, a new company created and controlled in part by current and previous management of Precision.

The business had gross assets of 2.3m at September 30, 2008, and made a 53,000 profit in the six months to the end of September 30, 2008.

However, Dyson said unaudited management accounts showed Precision's gross assets had fallen to 1.8m by the end of December 2009, and it made profits of 44,000 in the nine months to the end of 2009.

The firm added Jemmtec has also been granted a two-year lease with one year rent-free at its Dewsbury site, but will pay costs such as rates, security and maintenance.

Late last year Dyson sold its loss-making kiln furniture business to management for 1. The Stoke-on-Trent business designs and manufactures kiln furniture for the ceramics industry, and the deal saw the 70 staff transfer across.

Dyson, whose shares are suspended, has been hit hard by the downturn in the automotive industry, after entering the recession with a heavy debt burden.

It has been locked in talks with its banks Lloyds TSB and Svenska Handelsbanken for about a year over refinancing its debt, which stood at 38.8m in March.

The firm recently said it has made significant progress towards agreeing "a solvent debt and capital restructuring".

However, this is likely to mean a debt-for-equity swap, which would see creditors seize a significant proportion of the company in return for writing off some of its debts.

This would probably mean significant dilution for shareholders. Dyson said it will write to shareholders with a set of proposals once detailed terms have been agreed.